Increased Profit And Employment Decreased Appetite For İnvestment

Istanbul Chamber of Industry (ISO) announced the results of a "Turkey's Top 500 Industrial Enterprises-2016" survey yesterday at a meeting in Istanbul. İSO Chairman Erdal Bahçivan, who made a summary presentation, paid attention to the debt status of the company. Accordingly, while the share of debts in the shareholders' equity structure was 45.2 percent in 2007, it increased to 61.9 percent in 2016. This ratio showed the most negative debt / equity relationship in the last 10 years.

Erdal Bahçıvan said that industrial enterprises were not able to use their intenal resources to grow because a significant portion of their profits collected went to financing costs and that new investments were made more borrowing to grow due to insufficient and dissolved equity. The financial liabilities of ISO 500 increased by 18.8 percent in 2016 to 207 billion TL. In the period of 2014-2016, production sales increased by 7-8% on average, while there was an increase in financial debts exceeding 20%.

Looking at the ratio of fixed assets / current assets, which indicates the level of investment in the industrial sector, it is seen that in recent years the improvement in favor of fixed assets, even in small steps, has slowed down by 1 percentage point in 2016.

Erdal Bahçıvan said, "The decline in the share of fixed assets shows that firms' investments in fixed assets, in other words the investment in productive machinery and equipment, is weakening. It is important in terms of showing that the fixed assets of the ISO 500 Large Industrial Enterprises are rising to 46.3 percent in 2015 and then 45.3 percent in 2016, indicating that negative investment conditions in 2016 have limited fixed asset investments. "